Long Term Gas Contracts

[Spin_City]

I have been talking to a salesman from a energy company. Although we have been communicating for about 1 week and he has yet to give me a actual price!!!GRRRRR!!!, he seems to be implying that he can give me a 5 year contract to supply natural gas at approximately the price per therm of my most recent gas bill.

IF TRUE!!!, this seems like a great deal. My most recent gas bill was just about 1/2 price of my most expensive gas bill, mostly due to the recent drop in price per therm. I can't believe that gas will be any less expensive next January than it was this January. Everthing I have read predicts that gas will be more expensive than ever next fall/winter. So it seems like paying today's springtime rate through the next 5 winters is a fantastic bargain.

Does anyone have a long term gas contract? How is it working out? Are there any drawbacks or things to be careful of?

Does anyone have an opinion on this subject??

[Howard]

Don't know what your last bill was, but we are still at very high levels by historical standards. Gas prices will most likely drop in 12-18 months once all the damage in the Gulf is repaired and more gas wells come on line. Energy is very high now not just because of supply-demand constraints but due to a terrorism / geopolitical premiums that on oil are talked about at being about $20 per barrel.

I would not lock in for five years now, but that is me. If anyone knew what energy prices would do they would not be messing with washers and dryers.

[Spin_City]

Hey Howard,

Pretty good advice you gave back in April. I never did enter into a long term gas contract - lucky me! As I am sure you have all noticed, natural gas is dropping dramatically, along with gasoline.

The funny thing about long term gas contracts is that I heard on the news the other day that my electric bill is going to be going up by about 10%. Why? Because the electric company entered into a long term gas contract over the summer, which dramatically increases their cost of natural gas versus last year - despite the current low prices!!